BlackRock announced on Wednesday that it is expanding its tokenized liquidity fund, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), to operate on multiple blockchain platforms. According to the press release, the fund, originally launched on Ethereum in March 2024 and tokenized through Securitize, will now extend to new share classes on Aptos, Arbitrum, Avalanche, Optimism’s OP Mainnet, and Polygon.

This strategic expansion, as BlackRock and Securitize claim, is part of an ongoing push to enhance tokenization in the financial sector. By integrating with these blockchain networks, BUIDL reportedly aims to offer improved interoperability, enabling applications and users to interact with the fund more efficiently. The fund is expected to provide users with on-chain yield opportunities, real-time peer-to-peer transfers, flexible custody options, and the ability to accrue and distribute dividends on-chain.

The firms involved highlight that BUIDL has already reached a significant milestone, becoming the largest tokenized fund by assets under management (AUM) within 40 days of its initial launch. BlackRock asserts that expanding the fund’s presence across multiple blockchains will offer increased flexibility and access for various market participants, including decentralized autonomous organizations (DAOs) and firms native to the digital asset sector. The goal, according to the release, is to allow developers to leverage the fund within their preferred blockchain environments.

Carlos Domingo, CEO of Securitize, stated that this move aligns with the company’s vision of building a robust, blockchain-native financial ecosystem. He noted that real-world asset tokenization is scaling up and that the addition of new blockchains could potentially enhance the capabilities of the BUIDL ecosystem. Domingo believes this expansion could drive further interest from investors looking to utilize blockchain technology for increased efficiency.

BNY Mellon is mentioned as playing a role in facilitating this cross-chain integration. Acting as the fund administrator and custodian, BNY reportedly helped BUIDL go live on these additional blockchain platforms.

Each blockchain network will host a distinct share class of the BUIDL fund with specific management fees. For instance:

  • Aptos: A next-gen Layer 1 blockchain designed to enhance performance and user security. (20 bps fee)
  • Arbitrum: An Ethereum Layer 2 solution utilizing Optimistic Rollup technology for low-cost transactions. (50 bps fee)
  • Avalanche: Known for scalability and institutional adoption due to its EVM compatibility. (20 bps fee)
  • Optimism: Building the “Superchain” to unify multiple blockchains on a shared codebase. (50 bps fee)
  • Polygon PoS: A widely adopted EVM-compatible solution with extensive dApp activity. (20 bps fee)

The new blockchains are intended to enhance the interoperability of BUIDL, potentially opening up new avenues for integration with various decentralized applications.

Investors are cautioned that the fund carries various risks associated with blockchain investments, including regulatory uncertainty and market volatility. BlackRock emphasizes that BUIDL is designed for qualified investors with a high tolerance for risk, given that it operates under exemptions from U.S. securities registration requirements. The minimum investment threshold for BUIDL is set at $5 million, targeting institutional clients rather than retail investors.